tZERO Slashes Jobs, Salaries as It Gears Up for Another Funding Round

1 week ago 68

Jul 30, 2020 at 10:57 UTCUpdated Jul 30, 2020 at 10:58 UTC

Security token platform tZERO, which has tried to raise hundreds of millions of dollars in investment, has cut staff and salaries as it hunts for more capital.

In an otherwise upbeat company update Wednesday, CEO Saum Noursalehi said tZERO had "significantly reduced" its cash burn rate by 45% year-on-year. Savings came from cuts to legal costs and staff headcount; remaining senior staff took salary cuts in return for company equity. Board members are now compensated only in equity; Noursalehi said he reduced his own salary by 60%. "This underscores just how much I, and others, believe in our mission," his note reads; development work for the tZERO platform was mostly complete, he added. tZERO is now preparing for another capital raise, Noursalehi confirmed; a funding target wasn't disclosed. A majority-owned subsidiary of U.S. online retailer Overstock, tZERO raised $134 million in an initial coin offering in 2018 – short of its $250 million target. Chinese fund GoldenSands Capital pledged to lead a $374.55 million round for tZERO in 2018 – this was knocked down to a $5 million investment in April 2020.In the note Wednesday, Noursalehi claimed tZERO dominated the security token space, accounting for 95% of token trading volume and 80% of the dollar value.But the tZERO platform only has three broker-dealers and two security tokens – a third token, for real estate in Aspen, Colorado, is set to be listed soon.In an SEC filing for Q1 2020, tZERO said it made a gross profit just shy of $76,000 – the company reported a $10 million net loss in Q2 2019.

Disclosure

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

Read Entire Article